Oracle is down 40% since September... Why Wall Street is punishing the stock... The Magnificent Seven are still healthy... Boots on the ground in San Diego... Dave Lashmet's takeaways from a prominent Alzheimer's conference...
The latest in 'disappointing' AI earnings...
Is the "AI stocks boom" busting? We wouldn't say so across the board. But at least for one company, it looks like it... And it could be a sign of things to come for other stocks.
After markets closed yesterday, cloud-software giant Oracle (ORCL) shared its second-quarter earnings report, covering the three months ending November 30. Earnings per share came in at $2.26 and beat estimates, while revenue grew 14% and fell just short of expectations.
But all eyes were on the company's AI plans. We talked about the discussion around Oracle last quarter. And as Dan Ferris wrote after Oracle's first-quarter earnings in September, the company "just fired the starting gun on the AI stock market bubble."
Back then, Oracle reported strong earnings and much stronger forward guidance than was previously expected. This sent the stock shooting nearly 40% higher in a day, briefly making CEO Larry Ellison the richest man in the world. From the September 12 Digest...
Ellison also said he expects the company's annual cloud infrastructure revenue to grow from $10 billion today to $144 billion by 2030. That's a 14-fold increase in just five years.
In the company's first quarter, a lot of that strength came from a $300 billion deal with OpenAI. As a result, Oracle's remaining performance obligations ("RPOs") – contracted revenue that it hasn't received yet – surged 359% to $455 billion.
That trend continued in the second quarter, with more agreements from some of the biggest players in AI. From the press release...
Remaining Performance Obligations (RPO) increased by $68 billion in Q2 – up 15% sequentially to $523 billion – highlighted by new commitments from Meta, NVIDIA, and others.
This seems like good news about Oracle's customers and the huge orders that will hit its income statement in the coming years. However, the stock fell more than 11% immediately following the report in after-hours trading.
Shares remained well lower today, closing down around 11%. The sentiment about Oracle also weighed on other AI stocks, like Nvidia (NVDA) and Advanced Micro Devices (AMD). But Oracle was by far the biggest loser.
The stock is also now down nearly 20% from where it was before its first-quarter earnings report surprise and spike in September... And shares are down roughly 40% from the all-time high they hit after that report.
The trouble is Oracle's spending...
Yesterday, Oracle projected $50 billion in capital expenditures ("capex") during this fiscal year, up from its previous estimate of $35 billion. That would also be more than double the $21 billion Oracle spent on capex in its 2025 fiscal year.
On the surface, that doesn't seem too out of place with the rest of the AI leaders...
But companies like Microsoft (MSFT), Meta Platforms (META), and Alphabet (GOOGL) all produce loads of free cash flow ("FCF") from their core businesses. That position of strength allows them to spend big when they see fit.
Oracle doesn't have the same luxury. Our colleague and True Wealth editor Brett Eversole highlighted this at our annual Stansberry Research conference in October, and he wrote about the concerns about Oracle's growth strategy in his November issue. From Brett's report...
Unlike the hyperscalers we described above, Oracle's core business isn't massive. It generated about $12 billion in FCF in 2024. That's a lot by most measures... but not in the context of the current data-center build-out.
To fulfill its side of the [OpenAI] partnership, analysts estimate Oracle will need to spend all of its cash flow and borrow roughly $100 billion. It already borrowed $38 billion from a consortium of banks. And it's in the process of putting together an $18 billion bond offering.
From 2020 to today, Oracle has generated $51 billion in FCF. So to meet its capex goal of $50 billion for just this year, Oracle would have to use nearly all of the free cash flow it has generated over the past five years.
It's no wonder that the company has to turn to the debt markets to finance its investment. And that will make Oracle the "canary in the coal mine" for AI boom stocks that could go bust. More from Brett...
If the company can't raise the money it needs to fuel its growth, that will ring some alarm bells.
We're already seeing warning signs pop up. A measure of Oracle's credit risk just hit the highest intraday level since the financial crisis. That means folks are less confident in Oracle's ability to manage its debt load.
And the stock's drop since its September earnings report is more evidence that investors aren't completely sold on Oracle's big plans.
That doesn't mean we're at the end of the AI boom for stocks, though...
Most of the Magnificent Seven companies produce enough FCF to cover most, if not all, of their AI-spending plans. They're the ones leading the AI charge (and the broader market's run higher).
For Brett, that means "it's too early to give up on this bull market." There will be bumps along the way, as Oracle's report is providing today. But we don't recommend selling out of your stocks entirely. As Brett concluded...
But this expansion is still in its middle phase... And investors will see plenty of upside before real excess takes hold.
In short, if you're expecting a bubble peak and major crash, you'll be waiting for a while. So make sure you're on board... Don't miss out on the explosive gains as the AI boom surges on.
Paid-up True Wealth subscribers and Stansberry Alliance members can read Brett's full November issue – including where to be invested as the AI boom, or bubble, carries on – right here.
Switching gears, Dave Lashmet has a new 'boots on the ground' report...
As longtime readers know, Dave is the editor of our elite Stansberry Venture Technology newsletter. And he makes a habit of attending many of the biggest medical conferences in the world... so he can hear about the latest cutting-edge research firsthand and share why it matters for biotech investors.
Dave was in San Diego last week for the Clinical Trials on Alzheimer's Disease ("CTAD") medical conference, alongside 1,500 experts focused on the progressive brain disorder already facing more than 7 million Americans. As Dave explains...
I went there to get "the wisdom of the crowd." And this isn't just any smart crowd.
At medical conferences, doctors can learn what medicines and diagnostic tests to choose for their patients, but doctors don't have to pay for them. So, it's a pure medical science conference, with huge economic aftereffects.
In a piece for our Stock Market Trends website that you can read in full here, Dave shared three takeaways for investors in the $5 billion Alzheimer's-treatment market. Dave covers...
1) How medical experts are increasingly accepting the use of two antibody-based Alzheimer's drugs, one from Eisai (ESAIY) and the other from Eli Lilly (LLY). Clinical evidence suggests these treatments slow the progression of the disease by about 25%. Dave says...
This is an important first step in solving a dreaded disease. On average, these drugs give patients two more years of independent living, when folks with cognitive impairment can still engage with their families. Since Alzheimer's is otherwise 100% fatal within 10 years – and 50% fatal within five years – medically, these two antibodies are as important as the first cancer treatments.
2) A blood test that can detect Alzheimer's with high accuracy, with technology from Roche (RHHBY) being especially promising. As Dave writes...
The talk of the CTAD conference was the new blood tests for detecting brain plaque. Blood tests can be ordered by family doctors, and a blood draw is simpler for patients than older methods. Technically, the test looks for a damage marker in your blood, called phosphorylated tau, or just "P-tau." I saw study after study at CTAD where these blood tests matched their stage of Alzheimer's degree – and matched the results of the same patient's PET scan.
Four major diagnostics companies make these P-tau tests, but at CTAD I learned that the one from Roche (RHHBY) worked the best. This makes sense, since Roche is the world's largest medical diagnostic firm by sales. In turn, Roche has the biggest research budget. Plus, Roche has the widest footprint, which means it has the most machines to run these tests.
The emergence of diagnostic blood tests like this is potentially life-changing for untold people. But it also supports long-term growth for the use of Alzheimer's treatments and the companies that make them. "That's why we follow Roche, Eisai, and Eli Lilly in our model portfolio of stocks at Stansberry Venture Technology," Dave noted.
3) On the other hand, a large, long-term clinical trial for another drug failed to show any benefit in Alzheimer's treatment. This was Rybelsus, a diabetes/weight-loss drug from Novo Nordisk (NVO). Dave writes...
Frankly, it was remarkable that Novo's drug results matched the control group exactly. See, this was a huge trial: Two groups of 1,500 people volunteered to test this pill, or take a placebo pill, over the course of three years. That meant taking 1,000 pills per person, for no effect. Yes, patients lost a little weight. But this didn't help with their Alzheimer's disease.
Folks who lose weight will find it easier to exercise, which Dave says "directly rejuvenates your brain" and does reduce the risk of Alzheimer's. So the drug could have "additive effects" in a treatment for overweight or obese patients.
But as a direct treatment for Alzheimer's, he said Novo Nordisk's drug plainly failed in this trial.
"We do not currently follow Novo Nordisk in our model portfolio," Dave said. "I think you can see why."
Existing Venture Technology subscribers can find Dave's research and his full model portfolio here – and can expect more expert insight from him in the next monthly issue.
New 52-week highs (as of 12/10/25): Applied Materials (AMAT), Valterra Platinum (ANGPY), Broadcom (AVGO), American Express (AXP), BHP (BHP), Ciena (CIEN), Pacer U.S. Cash Cows 100 Fund (COWZ), Cisco Systems (CSCO), iMGP DBi Managed Futures Strategy Fund (DBMF), EnerSys (ENS), Equinox Gold (EQX), iShares MSCI Spain Fund (EWP), Fanuc (FANUY), SPDR Euro STOXX 50 Fund (FEZ), Comfort Systems USA (FIX), Cambria Foreign Shareholder Yield Fund (FYLD), GE Vernova (GEV), Lumentum (LITE), VanEck Morningstar Wide Moat Fund (MOAT), Pan American Silver (PAAS), Sprott Physical Silver Trust (PSLV), Royal Gold (RGLD), Roche (RHHBY), Robo Global Robotics and Automation Index Fund (ROBO), Skeena Resources (SKE), iShares Silver Trust (SLV), State Street SPDR Portfolio S&P 500 Value Fund (SPYV), Taiwan Semiconductor Manufacturing (TSM), Vanguard FTSE Europe Fund (VGK), and State Street Industrial Select Sector SPDR Fund (XLI).
A quiet mailbag today. As always, send your notes to feedback@stansberryresearch.com.
All the best,
Corey McLaughlin and Nick Koziol
Baltimore, Maryland
December 11, 2025
